Many Pioneer employees use the lunch hour to complete a workout in one of the facility's two gyms. In addition to separate male and female locker rooms, Pioneer has co-ed and women only workout rooms. James Durbin/Reporter-Telegram less

Many Pioneer employees use the lunch hour to complete a workout in one of the facility's two gyms. In addition to separate male and female locker rooms, Pioneer has co-ed and women only workout rooms. James ... more

Pioneer's new headquarters offers top-of-the-line facilities and amenities, said Barbara Smith, a senior administrative assistant in the land surface department who has worked 24 years for the company. James Durbin/Reporter-Telegram less

Pioneer's new headquarters offers top-of-the-line facilities and amenities, said Barbara Smith, a senior administrative assistant in the land surface department who has worked 24 years for the company. James ... more

Photo: James Durbin

Image 7 of 15

Open-area break rooms with a refrigerator, ice machine, beverages and ample storage space are scattered throughout the building and a nice amenity, said Pioneer Natural Resources revenue department manager Barbara Mueller. James Durbin/Reporter-Telegram less

Open-area break rooms with a refrigerator, ice machine, beverages and ample storage space are scattered throughout the building and a nice amenity, said Pioneer Natural Resources revenue department manager ... more

Photo: James Durbin

Image 8 of 15

Lunch is served, Monday through Thursday, to all Pioneer Natural Resources employees at the North Big Spring Street headquarters. In addition to a soup and salad bar, a hot entree and dessert are prepared daily. James Durbin/Reporter-Telegram less

Lunch is served, Monday through Thursday, to all Pioneer Natural Resources employees at the North Big Spring Street headquarters. In addition to a soup and salad bar, a hot entree and dessert are prepared ... more

Mark Timmons, a senior field operations manager for Pioneer Natural Resources James Durbin/Reporter-Telegram

Mark Timmons, a senior field operations manager for Pioneer Natural Resources James Durbin/Reporter-Telegram

Photo: James Durbin

Image 15 of 15

How companies attract the best employees — and how competition has skewed the playing field

1 / 15

Back to Gallery

Mark Timmons has worked decades in the oil industry, but it wasn’t until he started at Pioneer Natural Resources that he had direct contact with top tier executives.

"It is nothing for me to be eating lunch and for (chairman and CEO) Scott Sheffield or (President and COO) Tim Dove to come and sit at your table and engage in conversation about things going on in your area,” said Timmons, who works as senior field operations manager for the Permian Horizontal crew.

Timmons worked for Texaco in Louisiana before joining Pioneer in 2000 and knows how unusual it is to work with approachable managers.

“You don’t have that opportunity at many companies to sit down and visit face-to-face with Scott or Tim,” Timmons said.

As the Permian Basin has grown in the last few years with surging oil prices, energy firms have struggled to hire and retain workers in a strained job market. Oil companies like Pioneer - which The Dallas Morning News ranked as the top large company to work for in 2014 in the Dallas area - have faced a severe shortage of workers, as the local labor market dried up and a generational gap from low prices in the 1990s and early 2000s caught up with the industry.

This strain has led to a January unemployment rate of 2.6 percent and forced the oil industry to increase employee offerings, from skyrocketing six-figure salaries to fully paid health insurance and on site day care centers.

But the last few years of boom in the oil business has trickled down through the rest of the economy, straining businesses ranging from small mom-and-pop restaurants to fast food chains to retailers, some of whom pay up to $16 an hour to compete for the small pool of applicants. City and county governments have struggled to retain workers who may have switched over to the oil field to cash in on the rush, home prices have risen and rents have gobbled up an increasing amount of people’s pay.

Business owners and executives have been left to answer one major question - How do companies, from regional giants like Pioneers to government-backed school districts and small, local businesses, find and retain qualified employees in the midst of this competitive landscape?

RISE TO THE TOP

Pioneer’s rise as a top company to work for (The DMN ranked it No. 3 in 2011 and No. 2 in 2012 and 2013) has not been meteoric, but steady, based on the ethos grown by chief executive Scott Sheffield. He began his career in with Amoco in Odessa, working to gain experience but, in his words, “there wasn't a lot of attention focused on culture.”

“We didn’t have day care centers, gyms to work out. The only thing I remember was having a small Christmas party - that was basically it. No company ski trips like we have at Pioneer,” Sheffield said.

Sheffield’s work-oriented beginnings are a far cry from the culture he has fostered since becoming CEO of Parker & Parsley and then its successor, Pioneer, which was formed after P&P merged with MESA Inc. in 1997.

“We started doing things at Parker & Parsley to make it a more fun environment,” Sheffield said. “It wasn’t as much about retaining people at that point in time, but we started cultural summer picnics, company ski trips, the annual company golf tournament. We started adding things like that probably in the early ’90s, and it was just that we had a group of people and we talked about working hard but also about having fun.”

In addition to the picnics and ski trips, Pioneer’s attempt to create a good work-life balance included building a new regional headquarters on North Big Spring Street. The towering building of steel and glass features a free day care center, two workout rooms and a cafeteria that serves free communal lunch.

“I feel like they’re very competitive with the pay and just the health benefits, before all the additional amenities,” said Mary Rich, a senior accountant at Pioneer, who considers the day care a highlight of the new facility.

Rich said that having a 4-month-old infant was made easier because the day care is open from 6 a.m. to 6 p.m., allowing her to maintain her work schedule.

“We're just a phone call away,” she said of having the day care in the building. “It makes the work-life balance a lot easier.”

Another Pioneer location off Highway 80 in Midland offers a free health care clinic where employees and their family members can go for free checkups.

Pioneer also offers a benefit that one employee compared to the 1980s oil company: a 2-for-1 match on employee 401k retirement plans. That is just one of the benefits that drew Cody Pye from working with BP in Durango, Colorado, to the Permian Basin in 2011.

“One thing that they said was the 401k and the stock purchase plan,” Pye said. “That’s something that a major doesn’t have versus what Pioneer does offer. Another thing that is constantly brought up is the stock incentives. A way to award performance is with the stock program, which at my level with BP wasn’t offered.”

No matter if they have been with Pioneer for two years or two decades, Pioneer employees emphasize the company’s family-like culture, fostered by open communication between all levels within the company.

Pye, who works in Big Lake as the field operations manager for Pioneer’s Southern Wolfcamp team, said that he has stronger relationships with his Pioneer colleagues than he did at BP.

“From a culture standpoint, Pioneer even today is tough to beat because everybody really enjoys working together. The leadership is people that you trust, decisions are made and you may not always agree with everything, but you do trust that the decisions are being made for the right reasons,” Pye said.

But Pye said that one of the downsides of being an independent like Pioneer is the lack of training resources compared to a major like BP or Chevron. At 32, he has been in his position for 1 1/2 years, and he acknowledged that Pioneer took a risk by hiring someone so young for the position. With a budget that is much smaller than the majors, spending a few weeks on training is not an option. Yet as an independent, Pioneer’s leadership is more flexible and available for its rising young talent and leaders.

"A lot of these older guys and experienced vice presidents have gone through (the learning curve) and have taken the time to sit down with us and share that wisdom and experience,” Pye said of those who mentored him. “That’s a big difference as well from a major and an independent, because to get into that role (at a major) you almost have to have those years of experience because they’re more highly valued versus looking at more performance and track record and qualifications to perform the job.”

It’s this sort of team building that has led to retaining employees, even when recruited by other companies. That was something that Rosanne Eaden struggled with when she worked for a boutique recruiting firm trying to pull employees from Pioneer.

"Every time I tried to recruit someone - and I always wanted to recruit someone from Pioneer - I could never get them,” Eaden said. “The first thing that they said was that Pioneer cares about their employees, and that it’s a very family-oriented company.”

At the time she was keeping an eye on Pioneer as the up-and-coming independent, long before it grew to its current size of around 4,000 employees. No matter how hard she tried to recruit people away from Pioneer, she said she could not break their commitment to the company.

“I really got a sense that it was loyalty. They made these relationships and they enjoyed the crew that they were with. I remember someone told me that he had the best boss in the world and he would never leave him no matter what happened. I think the relationships built are key,” Eaden said.

Eaden has now been with Pioneer for 1 1/2 years as a senior recruiter in the human resources department, and in her time at the company the leadership has not only talked the talk, but they have also walked the walk.

“From the top down they constantly say employees are important,” she said. “From your managers saying one, ‘you need to take your vacation.’ They plan around making sure that you can take your vacation, and when you do take your vacation you unplug. You do not do work on your vacation because they believe in that work-life balance.”

For Susan Spratlen, the vice president of Pioneer’s Permian Affairs, her career has risen since she joined the company in 1990 and has never looked back. She recently moved back to Midland from Irving, where she had been based since Pioneer’s creation in 1997.

“The people that I have a pleasure to work with” are the reason Spratlen has remained with the company 25 years.

“They are just salt of the earth, caring men and women of character,” she said. “The benefits, the pay and all of those things are great, but when you get to work with people of such strong character, you don’t leave.”

In her time at the company Spratlen has lived and worked across the state, and she emphasized that it is Sheffield and the other executives who have created the essence of Pioneer.

"The reason that the culture is what it is has to do with character, and that’s not something you can fake,” Spratlen said. “So to build that kind of culture, it has taken us 30 years and just consistently doing the right thing, standing by your people, considering their best interests. At the end of the day I think that you can see great benefits - you can see a cafeteria, a workout room, the child care facility is fabulous. But it’s what you don’t see, it’s that environment that I think is what is the strongest tie to the company.”

SOME COMPANIES GAIN, OTHERS STRUGGLE

While the oil industry raised wages higher and offered an expanding set of benefits to retain employees, local companies and organizations were faced with a sudden increase in the cost of living and a draining of the workforce from the city out to the fields. The Bureau of Labor Statistics shows that Midland has had an unemployment rate of 3 percent or less since November 2013, hitting the low of 2.1 percent in December 2014.

The impact has been felt as restaurants, retailers and city and county governments have had to work understaffed and on overtime. For Baily Lively, Midland County human resource director, it’s been a struggle to find people as employees are lured away for higher salaries in the oil field.

“Unfortunately, we are the government and we have a set salary for each of our positions, so we don’t have a whole lot of wiggle room and our posted salary a lot of the time is what we can offer them,” she said regarding the county’s ability to compete.

The county does offer benefits such as free insurance for nonsmokers and a free health care clinic for all employees. They also have a retirement plan that the county matches by 180 percent. But that hasn’t stopped employee attrition - 26 percent of the county’s workforce turned over between October 2013 and October 2014. Juvenile and sheriff’s office detention units lost 79 employees, accounting for 57 percent of the detention workforce.

“In our detention center they have a hard time filling their shifts, making sure that they have enough people on our shifts so a lot of them are working overtime, which means that that’s less time at home with their family,” Lively said.

She said the drop in the price of oil is a double-edged sword. On one hand, the workforce pool may increase and improve in quality, but on the other hand, a dip in the local economy will affect everyone, reducing funds paid to the county.

Young professionals such as teachers have also been severely affected by the rapid growth, as rising home values and rents have forced Midland ISD to expand its employee incentive package. The U.S. Census estimated that rent almost doubled from 2005 to 2013, and the Real Estate Center at Texas A&M reported that average and median home prices have increased by 48.5 and 44.6 percent, respectively, since 2009.

It’s an issue that Ed Zachary, Midland ISD’s executive director of human resources, has faced head-on during his 13 years with the district.

MISD offers teaching staff a starting salary of $48,000, free health insurance, a matching annuity program and a textbook reimbursement program for those pursuing a master’s degree. For the 2014-15 school year, MISD offered housing assistance to new teachers - paying either 40 percent of their rent, up to $500, or a sign-on bonus of $10,000 spread out over three years.

"In our situation it became necessary to enhance (our comprehensive) package when the oil industry began to experience an upsurge and then we became not just partners with the oil industry, but competitors in the hiring field,” Zachary said.

Without the assistance of oil companies and private foundations, Midland ISD could not offer the housing stipends and sign-on bonuses.

“They have been unbelievably supportive,” Zachary said of the outside donors. “How we were able to do these extra things was through the generosity of private foundations that came in and volunteered to help attract people and to help retain employees ideally.”

Compounding the problem of recruitment and retention is Midland’s distance from Texas’ major population areas.

“Young people like to graduate from college and live in the high interest areas. Those are pretty well found along that I-35 corridor,” Zachary said. “What that leaves us in is a competition with recruiting young people out of the I-35 corridor metroplex areas to come five hours to Midland, Texas, in the Permian Basin.”

The school district usually isn't even the prime reason why a teacher has moved to Midland.

"An awful lot of times it’s not so much that we attracted them. It’s that their spouse was hired in the oil field,” he said. “So they came as a byproduct of their spouse seeking employment in the oil field, and then they are subject to the transfer of their spouse to another oil field location; thus they have to pick up and go, and we are back in the process of having to find and attract replacement people.”

This type of turnover has come at a time when Midland has faced unprecedented growth in its population (and consequently its school-aged children), forcing MISD to hire even more teachers. Zachary believes that the school district, as it tries to educate and provide a workforce, will benefit from continuing to develop relationships with the oil industry.

"We are in truth trying to solidify a long-term productive relationship for the oil companies, for providing their employees and the children of their employees, a quality educational environment. And at the same time they are interested in supporting schools so that they can have happy employees and people who want to stay,” he said. “It helps them attract people if they can say, come to Midland ISD and Midland, Texas, there’s a quality of life there for your family.”

But it’s unclear how that relationship will be affected by the drop in oil prices that has led to a slashing of oil company budgets and thousands of layoffs. Zachary is frank about what cuts in donations to MISD would mean for its comprehensive package.

“If we lose the support of our foundations and oil companies, then we would have to look at rolling that back. The alternative to that is looking more internally toward us raising the money locally and internally through our tax rate and then that becomes a problem in of itself,” he said.

RESTAURANTS WORK TO ADJUST

Understaffed and overworked, Midland’s restaurants and retailers have borne much of the brunt of the labor shortage. With hourly wages typically close to the minimum, some businesses have had to raise their wages in a race to see who can pay the most. Midland’s Abuelo’s is no different, according to general manager Craig Carpenter.

"When I started in 2006, the work level in the oil field was really starting to kick off at that point,” he said. “When I first arrived here we dealt with a lot of the same issues with employee retention, recruitment and turnover that we have dealt with recently. The only time that we saw a change in that was in 2009 when the price of oil dropped and production slowed down. But overall, we basically dealt with the same issues that we dealt with since I’ve been here in 2006.”

Carpenter pointed to a lack of potential employees as the main reason why many establishments are short-staffed. This has led Abuelo’s to enhance what they offer in order to attract new employees.

"We currently offer very competitive entry level pay rates for our hourly employees,” he said. “One other thing that we do that sets us apart from other restaurants in town is that we feed our employees a free meal per shift that they work. We also offer referral bonuses, if an existing employee refers another employee to us. We do have a number of small things like that to help us a bit with our recruitment.”

Compared to other markets, Midland also struggles because of the lack of large institutions such as universities, which provide a young and available workforce.

"My experience in both Lubbock and Amarillo is that they had a much larger workforce in both of those markets,” Carpenter said. “In Lubbock, with the number of universities in the market, they had a large number of student population that was well-suited to work in the service industry. The turnover in those markets was much lower.”

WILL THE DROP IN OIL CHANGE THINGS?

With oil resting in the $50 range and layoffs announced across the industry, the future is uncertain for Midland and its oil-reliant economy. Some workers have felt the effects of the layoffs directly, whether by being let go or by having their work hours reduced. But at Pioneer, Sheffield said employees and their benefits should be safe.

“We’re not going to cut back any employee incentives,” he said.

Pioneer announced on Feb. 10 that it would cut 45 percent of its capital spending compared to 2014, reducing its rig count by at least half, according to a report by the Wall Street Journal.

For Zachary, who has spent 48 years in education and 13 years in Midland, the downturn is not his first.

“We’ve been there, done that. That’s not something brand new to us because we’ve gone through the ups and downs of the economy relative to oil production and development,” he said.

Zachary said that a downturn could actually help the schools by reducing the hiring pressure that he and the district feel.

"If there’s a bit of a downturn and a layoff in the oil industry, that provides contributors to the pool of potential hires for us,” he said. “That may mean that there’s a fruit basket turnover type of thing as far as people moving in and out at the same time.”

Those who may not have gone through a downturn, or maybe who have gone through it one time too many, may turn to a career in something more stable, such as education.

"There might be people who might say, you know what, I think I would really not go through that potential boom-bust cycle; it seems to be pretty stable year in, year out in the school industry. I think I might be interested in pursuing that,” Zachary said.

MOVING FORWARD

Even as oil prices stagnate and the economy adjusts, few people have talked extensively about rolling back, and many are still playing catch-up. No matter who you talk to, there is still talk of expansion and trying to find some sense of balance.

“We can’t just stop the presses, so to speak,” Zachary said. “We have to continue to move forward to find ways to provide quality programs and quality teachers in the classroom. We are going to stay committed to the idea of moving us forward, and I think Dr. (Ryder) Warren would certainly echo that and say we are committed to the children.”

Restaurants and retailers are looking toward this time as an opportunity to fill their ranks and calm down after a few hectic years.

“Depending on the longevity of the lower price of oil, that will determine what impact it will have on my ability to recruit new staff members,” Carpenter said of Abuelo’s. “If the price of oil stays down three or four months, I don’t see too much change. If it stays down a significant length of time, then the cost of living will correct itself.”

For Pioneer, even with capital expenditure cutbacks there are still rigs out in the field, holes to be drilled and oil to be shipped.

When asked if there was a sense of stability, Eaden said, “I hope so.”

“I haven’t heard anyone within Pioneer with the doom-and-gloom type of attitude, which is different when you step outside these doors and everyone’s concerned after hearing that one company shut their doors or another company has

thousands of layoffs.”

Eaden emphasized that no one in Pioneer feels in the dark as the company tries to chart a path through these hard times.

"What has been key is that leadership has communicated all the way through,” she said. “They’ve said, even before the layoffs started to happen: ‘This is what our plan is - we’re going to make sure that everyone’s taken care of, and we’ll keep you informed.’ And I think that’s been the difference because we’ve been informed all the way through.”

Spratlen said relationships at Pioneer are a two-way street, and the management communicates because they care about their people.

"At the end of the day, I think that the anchor of the culture is mutual respect. By mutual I mean that employees respect our leaders but a lot of that is because they (the leaders) have so much respect for employees,” she said. “Respect is the word to me that captures a lot of it, and I think ... when we know and we can share something with you, we trust that that’s going to happen and that we are going to be communicated with because they respect their people.”